Spanish CRM outsourcing giant Atento is moving its Brazilian delivery centers to low-cost cities in an attempt to navigate the challenging economic climate in Latin America’s biggest economy.
In its 2Q16 fiscal report, the company stated that it was “rationalizing headcount” and relocating sites to lower-cost tier-2 and tier-3 cities as part of a plan to “improve efficiency”.
It has been almost a year since Atento began relocating its sites in Brazil, but the report shows that 62% of its Brazilian sites are located in tier-2 cities and the company spent US$200,000 on relocation during the second quarter alone.
Atento says its relocation program is designed to achieve “efficiency through rental cost reduction and attrition and absenteeism improvement.”
The Luxembourg-based company has posted a loss of US$8.1 million for the quarter, with revenue in Brazil dropping more than 10%. Interestingly, a large part of its loss in Brazil was offset by the increase in revenue elsewhere in Latin America.
Atento has employed more than 152,000 people across 99 contact centers, with Brazil accounting for nearly 45% of its revenue as well as headcount.
Over the past couple of years, a rise in minimum wage and the volatile foreign exchange market have hurt its business in Latin America. For example, in the second quarter, a 13% increase in minimum wage in Peru undercut much of its profits there.
“Margin impacted by investments in growth with new clients, an unexpected and mandatory 13% increase in minimum wages in Peru, and an increase in mix of revenue from Telco clients,” Atento stated.
To counter the weak economic climate, Atento is adding digital services to its offerings and hunting for high-valued contracts in financial services sector.